A tough year for farmers, a tough year for Alliance Group.
The meat company is facing its worst financial result since 2012, when it posted its first operating loss in 20 years.
Last year, it achieved a record profit before provisions, distribution and tax of $117.2 million.
Chairman Murray Taggart, who is in the midst of roadshow meetings around the country to update and meet shareholders, said the mood from farmers was fairly subdued.
But they also understood international markets "are what they are" and the company was limited in its ability to "swim against the tide".
The company’s financial result, due to be announced next month, was very disappointing and followed a "pretty terrible year". The international price fell very rapidly from October through to December and there was a inventory write-down of $55 million.
Real estate and debt crises in China, coupled with youth unemployment had led to a consumer confidence crisis.
A flood of Australian product coming on the market was also very unhelpful at the same time that markets were weak.
In New Zealand, there had also been discussion about southern drought, caused by La Nina.
Farmers needed to get stock killed and Alliance thought it was "doing the right thing" to provide that service — and then it rained.
There were a lot of people worldwide grappling with high inflation and high interest rates.
The company did not have a clear timeline for when the situation would improve, but Christmas sales, followed by the Chinese New Year, would give a good indicator "whether green shoots are out there or not", he said.
Beef had not had the hit that sheepmeat has had.
While there had been impact from China, a strong market in the United States had offset that, while venison had "picked up a bit".
Positively, Alliance was seeing some opportunities to capture more value for its core products.
It had been restricted in terms of its ability to maximise chilled products, but there were more opportunities now that logistics had reverted to normal.
There were some exciting opportunities around co-products and the ability for freeze-dried organs in the nutraceutical market, and Alliance had received approval to export female reproductive tissue from cattle as freeze-dried powder.
It cost the company $51/kg to produce and its first sale was concluded about three weeks ago, and $251/kg was achieved.
That was material which was previously rendered for "a few cents a kilogram".
The company was looking at all products and seeing where it could get the best returns.
"What we’ve got to do is capture more value for every head chopped off," Mr Taggart said.
Changes had been made to its loyalty structure and that meant not quite so much was going to its larger volume suppliers and the base schedule for smaller suppliers had been lifted.
Planting of "good sheep and beef land" into trees continued to be of "real concern" and it was frustrating that New Zealand was one of only two countries — the other is Kazakhstan — that allowed 100% offsetting in their carbon pricing mechanism.
No lawmakers had said they were going to address it.
The blame was not on farmers, as they had to do the best they could for the situation they were in, Mr Taggart said.
